What Does the Disaster Tell Us About Japanese Business?

Since the great earthquake and tsunami devastated northeastern Japan, I've been wondering what this will mean for the Japanese people, the economy and a highly interdependent world. While the full story will not be told for years to come, let me offer a few observations from a business standpoint, as well as thoughts about how foreign companies should proceed in this changed landscape.

In the face of the heart-wrenching destruction and loss of life, one of the most amazing and positive aspects of Japan's response is surely the great resilience, resourcefulness, and equanimity of the Japanese people. In story after story, we see people who have lost everything living peaceably together under the most difficult circumstances, organizing themselves, selflessly helping each other, and, at the same time, already beginning the rebuilding process.

Certainly these personal qualities are among the great treasures of the Japanese nation and a key ingredient of the economic success enjoyed by the country and its business sector. While Japanese corporate life can seem regimented to an outsider, the dedication, organization and industriousness of its workforce is truly extraordinary.

At the same time, the performance of Japan's leaders has been less impressive. Although seen through the foggy lens of a panic-hungry media, apparent mistakes in design, crisis management, and communication by the authorities regarding the Fukushima Prefecture nuclear disaster have undermined Japanese and foreign confidence in political and corporate leaders.

This too is familiar to many who have worked in Japan. All too often, corporate and political leaders in Japan lack the instincts, responsiveness and communication skills to motivate their constituents. Instead, authority often seems to rest in the position rather than the person, which can make it difficult to respond to a constantly evolving situation such as the nuclear crisis.

As the secondary impact of the disaster ripples across the corporate landscape, the business community is awakening to its heavy toll. Already Japanese and foreign manufacturers are experiencing shortages, and there will clearly be long-term damage to Japanese fishing, farming, tourism and power industries as they deal with the stigma of radiation contamination.

For foreign companies active in Japan, the first priority must be with people. Ongoing disruptions from the blackouts, threats to food and water supplies, and never-ending uncertainty are emotionally exhausting. Providing extra support and flexibility is critical; employees, customers and vendors all warrant more frequent check-ins and sensitivity to personal needs.

From a business standpoint, I would hope that foreign companies in Japan move forward rather than flee. This will undoubtedly require patience and flexibility on the part of foreign firms as their Japanese counterparts call "all hands on deck" to tackle a long list of challenges, including severe disruptions to the supply chain, relocated offices, and a work force under great pressure.

The situation in Japan will take months to sort itself out. But Japan is not going away. For those willing to stay the course and think creatively, these trying times may also serve as a catalyst for identifying new opportunities as partners rethink their business strategies and rebuild their country.

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